The state Inspector General’s report on the selection of Aqueduct Entertainment Group (AEG) to operate Video Lottery Terminals (VLT’s) at Aqueduct Racetrack should disturb many of us.

In 2008, the state's top three elected officials- Governor Elliot Spitzer, Senate Majority Leader Joseph Bruno and Speaker Sheldon Silver- decided to pick the developer for Aqueduct’s casino themselves. They also agreed to remove the restrictions that are usually imposed on lobbying state officials while a purchase contract was under consideration. This allowed campaign cash to flow to the decision makers. The process was doomed from the start.

The report was released last Thursday, and is available on the New York State Inspector General’s website. View the report.

The Inspector General (IG) concluded that the governor was not really involved in the decision making process, but allowed members of his staff speak for him. Most of the blame is placed on the leaders of the State Senate.

Majority Leader Joe Bruno helped write the legislation that removed the process from the normal contract approval process. After Bruno’s resignation, Senate Majority Leader Dean Skelos did not try to change the process.

After Democrats took control of the State Senate in 2008, Senator Malcolm Smith became deeply involved. He had already taken a $5,000 contribution from Karl O’Farrell, the principal in AEG.

Reverend Floyd Flake, the former congressman, and Malcolm Smith’s former employer had been made a minor stockholder in AEG. When objections to the presence of Flake and Darryl Greene, Smith’s former business partner, arose, Flake and Greene resigned from AEG.

Smith recused himself from the process, but the IG determined that Smith continued to advocate for AEG.

After the Senate coup when the Republicans took control of the Senate and the counter coup when the Democrats retook control, Senator John Sampson became the de facto leader of the Democratic majority. The report declares that Sampson pressured AEG to include a contractor in the deal before he would select AEG as the winner.

He was also found to have leaked information on competing bids to AEG.

The major criticism of Silver seems to be that he allowed the process to go forward although he knew that AEG could not get approval from the Lottery Division due to the record of violations of its principal leader Karl O’Farrell in his native country of Australia.

The scandal will hurt many of us.

The state has suffered a multi-million dollar loss because of the delay in choosing a new developer and collecting the continuing income from a successful development.

The State Senate has lost credibility because they are all being blamed for the scandal, but Senate Democrats do not have to wait for the legal process to conclude- before the next session they can choose a new leadership team.